17 Dec 2013


David R. Henderson, Debt, Economics, Potpourri, Rothbard, Scott Sumner 11 Comments

==> David R. Henderson reports on media bias in the Denver school shooting (one and two).

==> Some of these kids’ test answers are literally “laugh out loud” funny. Be sure you get what’s going on with the Chinese immigrant one.

==> A classic Rothbard essay on dealing with water shortages. Yes, he lays out the standard stuff about using prices to “ration” (he used quotes too) the available quantity, but it gets funny with what happened in California.

==> You can see me discussing it with him in the comments, but I am somewhat alarmed at how casually Scott Sumner is OK with the governments of the world increasing their debts in order to “provide safe assets” to investors, and furthermore with the idea of governments then using the borrowed funds to invest in stocks.

11 Responses to “Potpourri”

  1. Rick Hull says:

    Harless, to my reading, seems to be stuck in some 3rd-order fantasy land where 1st-order effects can be waved away. I don’t presume to understand it, but here’s what seems to be the relevant portion:

    > The US government can produce assets that are considered virtually risk free, and a stable Ponzi scheme operated by the US government could presumably produce such assets yielding any amount up to the growth rate. At today’s Treasury interest rates, which are clearly less than expected growth rates, marginal investors are (we can presume, since the assets are freely traded) indifferent between these low-yielding Treasury securities and investments that represent newly created capital. So, given the risk preferences of the marginal investor, the government could, by operating a stable Ponzi scheme, be producing assets that have a higher risk-adjusted return than newly created capital. Given the risk preferences of the marginal investor, it’s inefficient for the government not to be producing such assets.

    So this is all in pursuit of some higher-order efficiency, unintended consequences-be-damned.

  2. Tel says:

    Treasury bonds are not risk free. If you buy a government security now at low yield and then next month interest rates go up then you have made an immediate capital loss. Simple as that.

    Rates can’t keep dropping forever, so someone is going to get stuck with this, just a question of who.

  3. Harold says:

    The problem with those who point out media bias is that they tend to only point out bias in one direction.

  4. Innocent says:

    Hey Bob,

    This is way off topic which is why I am writing it in potpourri. I have been doing something for a while now and wanted to share it with people. I am on a diet ( I am a computer programmer with a very sedentary life style ) and am terribly unfit and to be honest… at least according to what I have learned, obese even though I only weighed 207 pounds. Well I started a diet plan where I am only allowed to spend $2.50 on average per day. Sort of made that up, the reason for so little is I wanted to make myself attempt to get full nutrition, while at the same time targeting 1,800 calories ( creating a calorie deficit – hence weight loss)

    I had to create software that is pretty cool in order to easily do this. Since I am a computer programmer I can do that lol. Anyway, I thought you might get a kick out of seen the project. I made a little funny ‘trailer’ for it as well.


    • Gamble says:

      I think if you are serious about losing weight and gaining health, you would spend more on your nutrients and exercise rather than less.

      Get off your ass, purchase great zero drop shoes and go jogging( good form running) every other day. Stop buying the cheapest food available( corn syrup) and instead purchase expensive natural foods, yes limit your caloric intake. Problem solved.

  5. Gamble says:

    Somebody explain to me why/how interest rates will double? I thought interest rates were yet another contrived fantasy fixed by the FOMC(aka Federal Reserve)? I predict interest rates will forever stay artificially low. This is how the overlords paper over their guilt . They think they are giving us a gift. It makes them feel good . We can purchase over regulated, over priced automobiles, so we can travel on congested roads to under paying jobs so we can pay inflated prices for inferior goods. Thanks Ben.


    • Tel says:

      The Mogambo Guru is back. That guy is brilliant!

      I predict interest rates will forever stay artificially low.

      I predict that the monetary inflation has to start washing through into price inflation over the next few years. Then the Fed will be stuck with the difficult choice of allowing rates to rise in order to control inflation, or keeping them low and “papering over the guilt” as you put it. If they allow rates to rise the US government is going to have one hell of a repayment situation, and if they keep them low the inflation, one started will get built into expectations. People will demand regular pay rises in their contracts and shops will start regular price hikes to keep up.

  6. Ken B says:

    An important point about Henderson’s first link. It is common when reprinting news stories, if you lack space, to drop from the bottom. The story is written so that any truncation will be even more biased, and the writers and editors know this.

  7. Matt M (Dude Where's My Freedom) says:

    I wrote a little about the Denver Post scrubbing the word “socialist” on my own blog last night.

    It’s a little amusing to see one of the most common Internet debating tactics employed by an editor at a mainstream newspaper. I have to say that whenever I call anyone a socialist or a communist for any reason, THE most common response I get is “You don’t even know what that means” (with zero attempt at explaining what it means, how I’m wrong, etc.)

    And yeah, if the classmates said “He was a very opinionated libertarian” my guess is the Denver Post just runs with that, rather than deleting it because it’s a very difficult word to define and the quoted student MAY be using it wrong.

    • Tel says:

      The correct thing to print would be “self-identified as a socialist” and thus accept that such a word does not have a universally constant meaning (few words do, and very few words in politics).

      • Matt M (Dude Where's My Freedom) says:

        Well, I don’t think it’s clear the gunman self-identified as a socialist. He was being identified as such by a classmate, whom the paper presumably believed to be a credible source, otherwise, why talk to him or quote him at all?

        If the New York Times interviewed me about Bob Murphy and I said “Bob is a pretty cool guy. He sings karaoke and is an anarcho-capitalist,” would it be good journalism for them to edit out everything BUT the anarcho-capitalist part on the basis that *I* probably don’t know what that means? If they think I’m an idiot, or that I’m not qualified to speak about Bob Murphy, then why are they talking to me in the first place?

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